HARBORVIEW LENDING GROUP, LLC 100 Summer Street, Suite 2800 Boston, Massachusetts 02110
May 17, 2023
BY ELECTRONIC MAIL AND OVERNIGHT COURIER
Cascade Retail Holdings Inc.
Attention: Derek Tanaka, General Counsel & Corporate Secretary
2200 Elliott Avenue, Suite 1400 Seattle, Washington 98121
Copy to:
Crescent Harbor Bank, National Association, as incoming Administrative Agent
Attention: Thomas Reiland, Managing Director, ABL Origination
780 Park Avenue, 30th Floor New York, New York 10021
Calderwood & Harkness LLP
Attention: Claudia Merritt / Marcus Leung
599 Lexington Avenue, 42nd Floor New York, New York 10022
Re: Payoff and Termination of the $175,000,000 Senior Secured Asset-Based Revolving Credit Facility (the "Existing Credit Facility") among Cascade Retail Holdings Inc. and Cascade Retail Operating Company LLC, as Borrowers, and Harborview Lending Group, LLC, as Lender and Administrative Agent
Ladies and Gentlemen:
1. Recitals; Background
Reference is hereby made to that certain Credit Agreement, dated as of September 12, 2019 (as amended by that certain First Amendment to Credit Agreement dated as of March 6, 2020, that certain Second Amendment to Credit Agreement dated as of November 20, 2020, and that certain Third Amendment to Credit Agreement dated as of July 15, 2022, and as further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), by and among Cascade Retail Holdings Inc., a Delaware corporation ("Cascade Holdings"), Cascade Retail Operating Company LLC, a Delaware limited liability company ("Cascade Operating," and together with Cascade Holdings, individually and collectively, the "Borrowers"), the subsidiary guarantors party thereto from time to time (each a "Guarantor" and collectively the "Guarantors"), and Harborview Lending Group, LLC, a Delaware limited liability company ("Harborview"), in its capacities as sole Lender and Administrative Agent. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
Pursuant to the Credit Agreement, Harborview made available to the Borrowers a senior secured asset-based revolving credit facility in the aggregate principal amount of One Hundred Seventy-Five Million Dollars ($175,000,000) (the "Existing Credit Facility"). The Existing Credit Facility is secured by substantially all of the assets of the Borrowers and the Guarantors, as more particularly described in the Security Agreement dated as of September 12, 2019 (as amended, the "Security Agreement"), and the other Loan Documents executed and delivered in connection with the Credit Agreement.
Cascade Holdings has notified Harborview that the Borrowers intend to refinance the Existing Credit Facility in connection with the anticipated closing of a new Three Hundred Million Dollar ($300,000,000) Senior Secured Asset-Based Revolving Credit Facility with Crescent Harbor Bank, National Association ("Crescent Harbor"), as Administrative Agent, and the lenders party thereto (the "New Credit Facility"). The Borrowers have requested that Harborview deliver this payoff letter (this "Payoff Letter") setting forth the aggregate amount required to pay in full all Obligations outstanding under the Existing Credit Facility and to obtain a release of all liens and security interests held by Harborview in connection therewith.
The anticipated date on which the Payoff Amount (as defined below) is to be received by Harborview is May 19, 2023 (the "Payoff Date").
In connection with the foregoing, Harborview hereby provides the following payoff statement and related agreements:
2. Payoff Amount
The total amount required to satisfy in full all Obligations of the Borrowers and the Guarantors under the Existing Credit Facility, calculated through and including the close of business on May 19, 2023, is One Hundred Twelve Million Four Hundred Fifty Thousand Dollars ($112,450,000.00) (the "Payoff Amount"), as set forth in the following breakdown:
The Payoff Amount is inclusive of all principal, accrued and unpaid interest, fees (including, without limitation, unused line fees, administrative agent fees, letter of credit fees, and any other outstanding fees), expenses, costs, and any and all other amounts owing by the Borrowers and the Guarantors under the Credit Agreement, the Security Agreement, and all other Loan Documents as of the Payoff Date, and represents the full amount necessary to satisfy all Obligations in their entirety as of the close of business on the Payoff Date.
The Payoff Amount has been calculated based on accrued interest through May 19, 2023. In the event that the Payoff Amount is not received in full on the Payoff Date and payment is instead made on a subsequent date, additional per diem interest shall accrue on the outstanding principal balance at the rate of $30,041.67 per day (based on the applicable interest rate under the Credit Agreement calculated on a 360-day year basis), and the total amount required to pay off the Existing Credit Facility shall be increased by such per diem amount for each calendar day following May 19, 2023 through and including the date on which the Payoff Amount (as adjusted) is received in full by Harborview in immediately available funds. The Borrowers acknowledge that any per diem adjustment shall be in addition to the Payoff Amount stated above.
Harborview hereby confirms that no prepayment premium, prepayment penalty, make-whole amount, early termination fee, or breakage cost of any kind is applicable in connection with the repayment and termination of the Existing Credit Facility on the Payoff Date.
3. Payoff Date
The Payoff Date is May 19, 2023. The Payoff Amount must be received by Harborview in immediately available funds no later than 2:00 p.m. (Eastern Time) on the Payoff Date. For purposes of this Payoff Letter, "immediately available funds" means a federal funds wire transfer received and finally credited to the account specified in Section 4 below.
In the event that the Payoff Amount is not received by Harborview in full in immediately available funds by 2:00 p.m. (Eastern Time) on the Payoff Date, this Payoff Letter shall automatically become null and void and shall be of no further force or effect, and Harborview shall reserve all of its rights, remedies, liens, and security interests under the Credit Agreement, the Security Agreement, and all other Loan Documents, without prejudice and without waiver of any kind. In such event, a new payoff letter must be requested by the Borrowers and will be subject to recalculation of all accrued and unpaid amounts as of the revised payoff date.
If the Borrowers anticipate that payment will be made after May 19, 2023 but desire to keep this Payoff Letter in effect, the Borrowers must contact the undersigned no later than 12:00 noon (Eastern Time) on May 19, 2023 to arrange for an extension and recalculation of the Payoff Amount, and any such extension shall be at the sole discretion of Harborview.
4. Wire Instructions
The Payoff Amount shall be remitted by wire transfer of immediately available funds to the following account:
Bank Name: Commonwealth National Bank, N.A. ABA/Routing Number: 011401533 Account Name: Harborview Lending Group, LLC Account Number: 8842-7701-6093 Reference: Cascade Retail Holdings Inc. — Payoff / Existing ABL Facility Attention: Steven Calloway, Vice President
The Borrowers and Crescent Harbor are solely responsible for ensuring that the wire transfer is initiated with sufficient lead time to be received and credited to the foregoing account by the deadline set forth in Section 3 above. Harborview shall have no liability for any delay in the receipt or processing of wire transfers by the receiving bank. The Borrowers are advised to confirm receipt of the wire transfer with Steven Calloway at the contact information provided in Section 10 below.
5. Release of Liens and Termination of Security Interests
Upon receipt by Harborview of the Payoff Amount in full in immediately available funds, Harborview hereby irrevocably agrees to take the following actions:
(a) Release all liens, security interests, pledges, charges, assignments, mortgages, and encumbrances of any kind or nature whatsoever (collectively, "Liens") held by or on behalf of Harborview on any and all assets, properties, and rights of Cascade Retail Holdings Inc., Cascade Retail Operating Company LLC, and each Guarantor under the Existing Credit Facility, including, without limitation, all Liens on accounts receivable, inventory, equipment, deposit accounts, securities accounts, intellectual property, real property, general intangibles, and all proceeds and products thereof, in each case whether now existing or hereafter acquired.
(b) Deliver to the Borrowers, or authorize the filing of, UCC-3 Termination Statements (each, a "Termination Statement") terminating in their entirety the following UCC-1 Financing Statements filed by or on behalf of Harborview as secured party in connection with the Existing Credit Facility:
(i) UCC-1 Financing Statement filed with the Delaware Secretary of State, File No. 2019-7438291, naming Cascade Retail Holdings Inc. as Debtor and Harborview Lending Group, LLC as Secured Party;
(ii) UCC-1 Financing Statement filed with the Delaware Secretary of State, File No. 2019-7438307, naming Cascade Retail Operating Company LLC as Debtor and Harborview Lending Group, LLC as Secured Party;
(iii) UCC-1 Financing Statement filed with the Washington Secretary of State, File No. 2019-284-5517, naming Cascade Outlet Stores LLC as Debtor and Harborview Lending Group, LLC as Secured Party; and
(iv) Any and all other UCC-1 Financing Statements, amendments, continuations, or other filings made by or on behalf of Harborview as secured party in any other jurisdiction in connection with the Existing Credit Facility.
(c) Execute and deliver to the Borrowers and/or Crescent Harbor (as incoming Administrative Agent under the New Credit Facility) any and all additional release documents, termination statements, mortgage releases, intellectual property security interest releases (including releases filed with the United States Patent and Trademark Office and the United States Copyright Office, as applicable), and any other instruments, certificates, or documents reasonably requested by the Borrowers or Crescent Harbor to evidence, confirm, and effectuate the release and termination of all Liens held by Harborview in connection with the Existing Credit Facility.
(d) Terminate all deposit account control agreements, securities account control agreements, and any other account control arrangements maintained by or on behalf of Harborview in connection with the Existing Credit Facility, including, without limitation, the Deposit Account Control Agreement dated as of September 12, 2019 among Cascade Retail Operating Company LLC, Harborview Lending Group, LLC, and Pacific Coastal Bank with respect to account number ending in -4417 at Pacific Coastal Bank, and any similar agreements with respect to any other deposit accounts or securities accounts of the Borrowers or the Guarantors. Harborview shall promptly deliver written notice of such termination to each depository bank or securities intermediary that is a party to any such control agreement.
Harborview shall deliver or file, or cause to be delivered or filed, all UCC-3 Termination Statements referenced in clause (b) above within three (3) business days following Harborview's receipt of the Payoff Amount in full in immediately available funds. All costs and filing fees associated with the filing of such Termination Statements shall be borne by Harborview.
In the event that Harborview fails to deliver or file, or cause to be delivered or filed, any Termination Statement within the three (3) business day period specified above, the Borrowers and/or Crescent Harbor are hereby irrevocably authorized by Harborview to file UCC-3 Termination Statements on Harborview's behalf with respect to any and all UCC-1 Financing Statements filed in connection with the Existing Credit Facility, and Harborview hereby appoints each of the Borrowers and Crescent Harbor as its attorney-in-fact for such purpose. This authorization and power of attorney shall be coupled with an interest and shall be irrevocable.
6. Termination of Existing Credit Facility
Upon receipt by Harborview of the Payoff Amount in full in immediately available funds on or before the Payoff Date (or, if applicable, as adjusted pursuant to Section 3 above):
(a) The Credit Agreement and all Loan Documents executed and delivered in connection therewith (including, without limitation, the Security Agreement, any guarantee agreements, any pledge agreements, any intercreditor agreements, and all schedules, exhibits, annexes, and side letters thereto) shall be deemed terminated and shall be of no further force or effect; provided, however, that any provisions of the Credit Agreement or other Loan Documents that by their express terms are intended to survive termination, including, without limitation, indemnification obligations under Article IX of the Credit Agreement, expense reimbursement obligations, confidentiality provisions, and any provisions relating to tax gross-up, withholding, and similar matters, shall continue in full force and effect in accordance with their respective terms.
(b) All commitments of Harborview to make loans, advances, or other extensions of credit under the Existing Credit Facility shall be irrevocably terminated and cancelled, and Harborview shall have no further obligation to fund any revolving loans, protective advances, or overadvances thereunder.
(c) All guarantees of payment, guarantees of collection, and any other guarantee or surety obligations executed by any Guarantor in connection with the Existing Credit Facility, including, without limitation, the Guaranty Agreement dated as of September 12, 2019 executed by Cascade Outlet Stores LLC, Cascade E-Commerce LLC, and Cascade Distribution Services LLC in favor of Harborview, shall be released and terminated and shall be of no further force or effect.
(d) Harborview confirms that, as of the date of this Payoff Letter, there are no letters of credit outstanding under the Existing Credit Facility, and accordingly no backstop, cash collateral, or other arrangement with respect to outstanding letters of credit is required in connection with the payoff and termination contemplated hereby. In the event that any letter of credit that was previously issued under the Existing Credit Facility is subsequently presented for drawing after the Payoff Date, Harborview acknowledges that the Borrowers shall have no liability or obligation with respect thereto.
7. No Outstanding Letters of Credit or Other Obligations
Harborview hereby confirms and represents that, as of the date of this Payoff Letter:
(a) There are no letters of credit, bankers' acceptances, or other contingent obligations of any kind outstanding under the Existing Credit Facility.
(b) Upon receipt of the Payoff Amount in full in immediately available funds, no further amounts of principal, interest, fees, expenses, costs, or any other sums shall be owing or payable by the Borrowers or any Guarantor under the Existing Credit Facility or any Loan Document, other than (i) indemnification obligations that by their express terms survive termination of the Credit Agreement, and (ii) expense reimbursement obligations that by their express terms survive termination of the Credit Agreement, in each case only to the extent that a claim giving rise to such obligation arises or is asserted after the Payoff Date.
(c) In the event that, notwithstanding the foregoing, any amounts are subsequently discovered to be owing by the Borrowers under the Existing Credit Facility that were not included in the calculation of the Payoff Amount, Harborview shall promptly notify the Borrowers in writing of the nature and amount of such additional obligation, and the Borrowers shall pay such amount within ten (10) business days following receipt of such notice, together with reasonable supporting documentation. Conversely, in the event that the Payoff Amount received by Harborview exceeds the aggregate amount of all Obligations actually owing under the Existing Credit Facility as of the Payoff Date, Harborview shall promptly refund any such overpayment to the Borrowers by wire transfer of immediately available funds to an account designated by the Borrowers within five (5) business days following Harborview's determination that an overpayment has been made.
8. Direction to Pay
The Borrowers hereby irrevocably direct and authorize Crescent Harbor Bank, National Association, in its capacity as Administrative Agent under the New Credit Facility, to disburse the Payoff Amount directly to Harborview in accordance with the wire transfer instructions set forth in Section 4 of this Payoff Letter on the Payoff Date, on behalf of and for the account of the Borrowers. Such disbursement shall constitute a borrowing by the Borrowers under the New Credit Facility and shall be applied by Harborview in satisfaction of all Obligations outstanding under the Existing Credit Facility.
Harborview hereby acknowledges and agrees that receipt of the Payoff Amount from Crescent Harbor (or from any funding source designated by Crescent Harbor in connection with the closing of the New Credit Facility) shall constitute full and complete satisfaction and discharge of all Obligations of the Borrowers and the Guarantors under the Existing Credit Facility, as if such payment had been made directly by the Borrowers. Harborview shall not require any separate or additional payment from the Borrowers as a condition to the release of Liens and termination of the Existing Credit Facility as contemplated by this Payoff Letter.
9. Representations and Confirmations of Harborview
Harborview hereby represents, warrants, and confirms to the Borrowers and to Crescent Harbor, as of the date hereof and as of the Payoff Date, as follows:
(a) Harborview is the sole lender and Administrative Agent under the Credit Agreement and the Existing Credit Facility. No participation interests in any of the loans or commitments under the Existing Credit Facility have been sold, assigned, or otherwise transferred by Harborview to any other person or entity.
(b) The Payoff Amount, as set forth in Section 2 above, represents all amounts owing by the Borrowers and the Guarantors under the Credit Agreement and all other Loan Documents as of the Payoff Date, subject only to the per diem adjustment described in Section 2 in the event payment is not received on May 19, 2023.
(c) Harborview has not assigned, sold, transferred, pledged, hypothecated, or otherwise conveyed or encumbered any of its rights, title, or interest in, to, or under the Credit Agreement, the Security Agreement, the Loan Documents, or any of the Obligations to any third party, and Harborview is the sole holder and beneficial owner of all Obligations under the Existing Credit Facility.
(d) Other than the UCC Financing Statements and Liens specifically described in Section 5 of this Payoff Letter, Harborview does not hold, and has not filed any public record evidencing, any other lien, security interest, mortgage, deed of trust, pledge, charge, assignment, or encumbrance on or against any assets, properties, or rights of the Borrowers, any Guarantor, or any subsidiary of the Borrowers, in connection with the Existing Credit Facility or otherwise.
10. Contact Information
All questions, communications, and inquiries regarding this Payoff Letter, the payment of the Payoff Amount, and the release and termination actions described herein should be directed to:
Steven Calloway, Vice President Harborview Lending Group, LLC 100 Summer Street, Suite 2800 Boston, Massachusetts 02110 Telephone: (617) 555-2480
Email: scalloway@harborviewlending.com
11. Governing Law
This Payoff Letter and the rights and obligations of the parties hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction.
12. Miscellaneous
This Payoff Letter may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Payoff Letter by facsimile or by electronic transmission in portable document format (PDF) shall be effective as delivery of a manually executed original counterpart.
This Payoff Letter constitutes the entire agreement among the parties with respect to the payoff, release, and termination of the Existing Credit Facility and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether written or oral, relating to the subject matter hereof.
This Payoff Letter may not be amended, modified, supplemented, or waived except by a written instrument signed by each of the parties hereto. No failure or delay by any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof.
If any provision of this Payoff Letter shall be held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Payoff Letter, and this Payoff Letter shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned has executed this Payoff Letter as of the date first written above.
HARBORVIEW LENDING GROUP, LLC, as Lender and Administrative Agent
By: ________
Name: Steven Calloway
Title: Vice President
Date: May 17, 2023
ACKNOWLEDGED AND AGREED:
CASCADE RETAIL HOLDINGS INC.
By: ________
Name: Elena Kowalski
Title: Chief Financial Officer
Date: ________
CASCADE RETAIL OPERATING COMPANY LLC
By: ________
Name: Elena Kowalski
Title: Authorized Representative
Date: ________
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, as incoming Administrative Agent under the New Credit Facility
By: ________
Name: Thomas Reiland
Title: Managing Director, ABL Origination
Date: ________
cc: (via electronic mail)
Derek Tanaka, General Counsel & Corporate Secretary, Cascade Retail Holdings Inc. Priya Anand, Treasurer, Cascade Retail Holdings Inc. Claudia Merritt, Calderwood & Harkness LLP Marcus Leung, Calderwood & Harkness LLP Bernard Ashford, Whitfield, Greer & Holloway LLP Julianne Strickland, Crescent Harbor Bank, N.A.
| Component | Amount |
| Outstanding Principal on Revolving Loans | $109,500,000.00 |
| Accrued and Unpaid Interest (through May 19, 2023) | $1,712,361.11 |
| Accrued and Unpaid Unused Line Fee | $487,638.89 |
| Administrative Agent Fee (Q2 2023, pro rata) | $125,000.00 |
| Accrued and Unpaid Legal Fees and Expenses of Harborview | $75,000.00 |
| Field Examination and Collateral Monitoring Fees (outstanding) | $550,000.00 |
| Total Payoff Amount | $112,450,000.00 |